I had thought the fiber M&A frenzy would ebb for the holidays, but no. Following closely on the heels of Sidera's purchase of LIFE, Lightower Fiber Networks has struck again, making its third acquisition this year. This morning the northeastern regional and metro fiber operator announced the acquisition of Open Access Inc. Open Access is based in Farmingdale, NY, and operates a fiber network across Long Island and into Manhattan, with over 400 route miles and 230 fiber-fed buildings as well as a tier-2 colocation facility at their headquarters.
Lightower already had substantial assets out on Long Island that came mostly from their acquisition of Keyspan Communications a few years ago. In fact, if memory serves then I'm pretty sure that Open Access's network was built at least partly on Keyspan's assets. So there is probably substantial overlap between the two networks, but the deal will get Lightower into many more enterprise buildings in the region. Thus, they consolidate the additional customers and revenue onto their network and thereby increasing their scale in the region, while also simplifying the competitive landscape.
Backed by private equity, Lightower has been one of the most active consolidators in the fiber marketplace this year. Over the summer they purchased Veroxity, which deepened their presence in the Boston metro area. And just two weeks ago they completed the acquisition of Lexent Metro Connect, which gave them a major density boost in Manhattan as well as some extra depth across the Hudson River in New Jersey. Before this newest deal, their regional fiber holdings topped 5,500 route miles and 2,100 on-net buildings.
Is it time for Lightower to slow down and digest? Or might they still be hungry? If it is the latter, I would look for them to continue filling gaps and adding fiber in directly adjacent territories. That would mean fiber assets in Connecticut, New Jersey, or perhaps Albany would be targets. However, the list of potential candidates is somewhat depleted - there's been so much activity this year already. There is some more fiber out on Long Island though, OCG comes to mind, and we still haven't heard a final word from NSTAR up in Boston.